Government plans to consider $550 million financial incentives to woo Apple, Dell and Asus: details

India plans to increase financial incentives for manufacturers who make tablets and laptops in the country, courting companies such as Apple and Dell as part of its bid to challenge China as a production base. .

The federal Department of Technology has presented the revamped program to electronics industry leaders for consultation, including payments that could exceed half a billion dollars per company, people familiar with the matter said. India wants to increase production of tablets and laptops to reduce imports and make the country a longer-term export hub.

The effort is aimed at companies including Apple, Dell, HP and Asustek Computer to expand or start local production, the people said. The country notably wants to persuade Apple, which already assembles iPhones in India via its Taiwanese suppliers, to manufacture iPad tablets locally.

The plan offers as much as Rs. 4,500 crores per manufacturer, according to a government document seen by Bloomberg News. To be eligible, foreign companies would have to invest Rs. 6% of finished product sales.

The plan may change after consultation with industry. Last year India launched a program worth Rs. 7,350 crore to accelerate local manufacturing and expand exports of IT products such as laptops, tablets and personal computers, effort failed to attract business due to the perceived small size of the incentives.

Prime Minister Narendra Modi’s administration has stepped up efforts to attract global electronics names through policy initiatives, as China’s appeal wanes due to geopolitical tensions and its disruptive COVID Zero policy . There are signs of momentum: Apple has started manufacturing its new iPhone 14 in India ahead of schedule, after a surprisingly smooth production rollout that reduced the lag between Chinese and Indian production from months to weeks.

Apple has yet to expand iPad production to India, however. Incentives aside, the US company could be drawn to an Indian computer and tablet market that grew 12% last quarter, researcher Canalys said, even as global demand for electronics slowed.

Companies like Dell and HP, which already manufacture laptops in India on a small scale and have excess capacity, might find it unattractive to invest further to ramp up production. Chinese manufacturers such as Lenovo, meanwhile, could struggle to win the incentives amid New Delhi’s frosty relationship with Beijing since a clash on the Himalayan border between the countries in 2020.

© 2022 Bloomberg L.P.

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